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(Alliance News) - Stocks in London ended lower on Wednesday with the FTSE 100's gains from heavyweight miners counterbalanced by declines in housebuilding sector.
The FTSE 100 index closed down 7.20 points, or 0.1%, at 6,524.36. The FTSE 250 ended down 116.50 points, or 0.6%, at 20,996.44 and the AIM All-Share closed flat at 1,211.51.
The Cboe UK 100 index closed down 0.2% at 647.90. The Cboe 250 closed down 0.4% at 18,514.67 and the Cboe Small Companies closed flat at 12,689.61.
In Paris the CAC 40 ended down 0.4%, while the DAX 30 in Frankfurt ended down 0.6%.
In the FTSE 100, miners ended among the best performers tracking commodity prices higher amid dollar weakness.
Spot platinum rallied to USD1,230.5 an ounce on Wednesday, up sharply from USD1,183 on Tuesday. In base metals, spot copper jumped to USD8,146.50 a tonne, up from USD7,992, and spot aluminium drifted higher to USD2,045 a tonne from USD2,027.50. Platinum climbed to its highest level in more than six years.
Axi analyst Stephen Innes said: "Although a fabrication supply rise is likely this year, strong investment demand should again push the platinum market into a deficit. Other drivers include real low rates, a weaker USD, and global economic recovery thanks to aggressive stimulus measures."
Anglo American, Glencore, Rio Tinto and BHP closed up 4.8%, 2.7%, 2.6% and 1.3% respectively.
At the other end of the large caps, housebuilders finished among the worst performers, despite an upbeat performance from midcap peer Redrow, as investors anticipate the end of the UK government's stamp duty holiday next month.
Berkeley Group, Taylor Wimpey, Persimmon and Barratt Developments ended 4.5%, 4.2%, 2.8% and 2.5% lower respectively.
Redrow posted a double-digit first-half profit rise, crediting a strong sales market driven by pent-up demand from the first national lockdown, the introduction of the stamp duty holiday and the impending end of the Help to Buy scheme for existing home owners. The stock closed down 3.8%.
"The selling pressure we are now seeing highlights the markets disdain for fleeting and short-lived periods of outperformance. The fact that the housing market was always expected to contract once the stamp duty holiday boost came to an end has restricted valuations across the housebuilding sector. With the Halifax HPI showing the first month of contraction since May, we are already seeing the beginning of the steam taken out the sector," said IG Group's Josh Mahony.
The pound was quoted at USD1.3845 at the London equities close, up sharply from USD1.3790 at the close Tuesday.
Sterling hit its highest level in almost three years against the dollar in early trade as investors grow increasingly confident the UK's recovery from the coronavirus pandemic.
The pound's rally was sustained as the UK's rapid Covid-19 vaccination programme continued apace and the threat of negative interest rates being implemented by the Bank of England faded. The UK currency is up 7.5% so far this year against its US counterpart and was trading at its highest levels since April 2018.
UK Prime Minister Boris Johnson has set a target for all the people in the over-70 age group to be offered a coronavirus vaccine by February 15. So far, around 13 million people across the UK have received a Covid-19 inoculation.
"GBP/USD has today risen its best levels since April 2018 as investors continue to pile into the racier pound and out of the US dollars amid ongoing 'reflationary' and 'risk-on' trades. The pound has been pushing up across the board since the turn of the year due to a no-deal Brexit being avoided and the UK is currently well ahead of many countries in the race to vaccinate its population. Together, these developments have boosted expectations that the UK economy could potentially recover quicker and stronger once lockdowns end," said ThinkMarkets analyst Fawad Razaqzada.
The euro stood at USD1.2135 at the European equities close, up from USD1.2100 late Tuesday. Against the yen, the dollar was trading at JPY104.66, flat from JPY104.62 late Tuesday.
Stocks in New York were in the red at the London equities close following a benign US inflation report, as earnings season rolled on.
The DJIA was down 0.1%, the S&P 500 index down 0.4% and the Nasdaq Composite down 1.0%.
US annual inflation was weaker than expected in January, official data showed, though monthly consumer price growth met market forecasts.
According to the US Bureau of Labor Statistics, consumer prices rose 1.4% annually in January, though a 1.5% climb in prices was forecast, according to consensus cited by FXStreet. In December, consumer prices also had risen 1.4% yearly.
Excluding food and energy, core consumer prices were up 1.4% annually in January, easing from December's 1.6% rise. For January, a 1.5% core price rise was expected by the market. On a monthly, consumer prices were up 0.3%, a figure which met consensus. It followed a 0.2% monthly rise in December.
On the corporate front, Coca-Cola Co posted a fall in earnings for 2020 and said the business has felt pressure at the start of the new year from a resurgence in coronavirus infections.
Net revenue in the fourth quarter of 2020 fell 5% to USD8.61 billion, while organic revenue declined 3%. This was driven by a 3% fall in price/mix, while concentrate sales were even.
Coca-Cola noted it continued to see an improvement in trends in the final three months of 2020 compared to prior quarters, with net revenue for the full-year sliding 11% to USD33.01 billion and organic revenue down 9%.
Fourth-quarter earnings per share fell 29% to USD0.34, hit by currency headwinds in the final quarter of the year, while full-year EPS declined 13% to USD1.79.
The stock was up 0.2% in New York.
Elsewhere, Twitter shares surged after the social media platform late Tuesday its user base jumped to 192 million in the quarter marked by US presidential election turmoil and a battle against misinformation. The stock was up 9.0% in New York, trading at record-setting levels.
Ranks of "monetizable" daily active Twitter users rose 27% from a year earlier during the fourth quarter, which ended just days before former president Donald Trump was banned from the platform.
Brent oil was quoted at USD61.40 a barrel at the equities close, up sharply from USD60.70 at the close Tuesday. The North Sea benchmark was trading at its highest levels in over a year.
"Oil prices are continuing to climb despite sentiment appearing to fade elsewhere. The softer dollar is offering some support to prices but I think this is still primarily being driven by increasing optimism about the economic outlook as vaccines are rolled out," explained Oanda Markets analyst Craig Erlam.
Gold was quoted at USD1,837.45 an ounce at the London equities close, flat against USD1,837.66 late Tuesday.
The economic events calendar on Thursday has US jobless claims at 1330 GMT. In addition, financial markets in China and Hong Kong will be closed for Chinese New Year Eve, while markets in Japan will be closed for the National Foundation Day holiday.
The UK corporate calendar on Thursday has annual results from Anglo-Swedish drugmaker AstraZeneca, soft drinks bottler Coca-Cola HBC and from information and data analytics provider RELX.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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